Facebook relooks its approach to advertising

Facebook has announced that it will cut the number of advertising options dramatically. How will it affect advertisers?

Facebook, the marketers' go-to place for social marketing, has said that it will simplify the platform's advertising formats that include at least 27 ways through which advertisers can promote their brands. The big change is that over the next six months, all the ad formats on Facebook will have a social context.

"Marketing should be simple. Marketers of all sizes should be able to give Facebook their business goals, and Facebook will generate the right combination of products to help them achieve it," the company said in a recent blog post.

In doing so, however, Facebook will remove some of its features that have become quite popular among advertisers. Calling it a move to eliminate redundancies, Facebook will remove its 'Questions' and the 'Online Offer' ad format, because neither worked quite the way it had hoped.

Besides, the platform will also re-do 'Sponsored' Stories and include them in all ad formats. Until now, advertisers had to pay a separate amount for adding "social context" to their ads. Now, all ads will have a social context attached to them.

This means that advertisers will no longer have to take the extra step of creating sponsored stories. The platform will phase out Sponsored Stories as standalone ad units and wil effectively merge them into all ad products to boost performance and simplify ad-buying.

Fixed connection?

In spite of doubts about its ability to attract advertising revenue, Facebook ended 2012 with revenue of over $5 billion. Even in India, it probably earns more from digital advertising than any other player, except Google.

So, will the changes in the ad product mean that Indian businesses and advertisers will need to change the way they use Facebook ads?

Manu Kumar Jain, co-founder and managing director of Jabong.com, is happy with the imminent changes. "Facebook is a big point of discovery for Jabong.com and we feel that this is a welcome change as a large number of formats result in confusion for both the advertisers and the consumers. Earlier, it was all about delivering the same message to the consumers in different ways and then deciding which format works best. Now, it will be about the message getting stronger as it will be delivered to the consumer in one powerful way," adds Joseph.

Simply better...

"Any simplicity and larger focus on business is good for the Indian market because Facebook ads are something which most marketers haven't explored to their full potential. With more decision makers participating and the media delivering more effective ROI, it's a definite plus for advertisers," states Saurabh Parmar, founder and CEO, Brandlogist, a brand consultancy firm.

"Truly speaking, the marketers don't care about the formats of Facebook ads because a majority of them use it for performance marketing. So, whether the user action is coming from a text ad or a visual ad, small ad or a large ad, it doesn't matter to them. Since India is a huge market for Facebook, the impact is likely to be large but in a positive direction," asserts R P Singh, CEO, Sirez Group.

Consumer edge

For the consumers, it does mean that they will have to encounter only one form of advertisement from brands on the platform. This is a great step towards improving user experience for users who are currently perplexed by the number and types of ads they have to encounter while they use the platform.

"The near impact will not be that much. But if the new ad formats drive more value per fan or ROI then I think it will good for both marketers and publishers. For instance, Hashtags, which have been launched recently, can be a good marketing tool on Facebook and can drive a lot of traction," concludes Shekhar Sharma, national director, search, platforms and performance, GroupM Interaction India.